Dean Criscitiello's questions to TWFG (TWFG) leadership • Q4 2024
Question
Dean Criscitiello of Keefe, Bruyette & Woods inquired about the EBITDA multiples TWFG is seeing in its M&A pipeline and how competition for those deals has trended. He also asked for an update on the business performance and churn of new branches onboarded in the second half of 2024.
Answer
Richard Bunch, an executive at TWFG, stated that M&A multiples range from 9-10x EBITDA for smaller deals to 10-12x for larger ones, with micro-portfolios trading at 1.5-3x revenue. He noted that since 2024 was a 'pencils down' year for acquisitions, there was no prior quarter trend to compare. Regarding new branches, he explained that they take 2-3 years to contribute meaningfully to results and that it is too early to identify a clear trend on agent churn, though some consolidation of smaller locations is occurring for efficiency.